Converting algae to biofuel remains an intractable problem even when a company has the resources of a Sapphire Energy and Algenol.
Imagine the challenge facing Bio Architecture Lab. The secretive company confronts the same battle with high costs as it tunes its bioengineered microbe to convert seaweed to ethanol on a commercial scale. But money is nowhere near as plentiful.
Start-up Bio Architecture Lab says it is mid way to 90 percent fuel conversion target.
In a rare discussion of its business, the Berkeley company says it is about half way to its 90 percent fuel conversion target. Confidence is high, says Vineet Rajgarhia, senior vice president of research, who joined the firm in May when it appointed former Shell executive Daniel Trunfio as CEO.
Reaching the target “is doable,” Rajgarhia said at the Cleantech Institute conference at the University of California, Berkeley. “It just needs a little more time.”
That “little more time” is about a year.
The company, spun out of the University of Washington, intends to commercialize its seaweed enzyme for both fuels and chemicals. Up to now, it has been reluctant to offer details about its technology or business plan. But perhaps new management is more willing to communicate.
For example, Rajgarhia says the company’s business plan does not include raising the several hundred million dollars necessary to build its own biorefinery and compete against better-funded competitors. “We’ll be partnering up,” he says.
He also says the company has the breathing room it needs to complete its bioengineering. Rajgarhia estimates the company will require another year to prepare its technology for large-scale deployment. It is no easy task, but since the firm’s goal is to open its Chilean pilot project in 2012, it has the time.
The organization is one of an ambitious few trying to cultivate seaweed, or macro-algae, in shallow coastal waters and turn it into low-cost fuels. In contrast to micro-algae, which floats on the surface, most seaweed, or kelp, attaches itself to the ocean floor and presents a complex harvesting challenge. The effort is likely worth the trouble. Macro-algae can be grown for an estimated $40 a ton, or 4 cents a pound of sugar, far less than corn or sugar cane. It also uses no agricultural land, fresh water or fertilizer and helps filter ocean waters
Because of the potential economics, its cultivation has drawn the interest of a disparate group of organizations, including Blue Sun Energy of Colorado, Seambiotic of Israel, the Scottish Association for Marine Science and South Korea’s Korea Institute of Industrial Technology.
Bio Architecture Lab drew notice earlier this year when it received a $9 million research grant from the Department of Energy’s ARPA-E. With the award to develop biobutanol, it received matching funds from partner DuPont and last year raised an $8 million series A round with investors X/Seed Capital of Menlo Park, the venture arm of Norways’ Statoil oil company and Austral Capital of Chile. It also received $7 million in economic development money from Chile.
Rajgarhia said a second key challenge Bio Architecture Lab faces is logistical: getting the macro-algae ashore at a cost low enough to produce affordable fuel. The seaweed is fast growing – about 2 feet a day – so volumes add up. And current harvesting techniques are geared toward high-priced food production, so costs are not in line with low-price fuel.
All these tasks, of course, takes money. For companies such as micro-algae developer Sapphire Energy, which has raised more than $100 million, including money from Bill Gates, and Algenol, which promises to fund an $850 million commercial project in Mexico, writing the big check may be possible.
Bio Architecture Lab doesn’t appear to have the same huge outlay in the cards. For the immediate future, at least, “we have a bit of a runway” with the money raised, says Rajgarhia. Long term, it will be interesting to see which business model prospers.
Posted by Mark Boslet 
